The publishing industry [Archive]

DG Information Society has made boosting the competitiveness of the European print industry a priority. To this end, the Commission held, in autumn 2005, a consultation to gather stakeholders’ views on the policies needed for the industry. 

Background

The publishing industry as the Commission defines it in its staff working paper as comprising four sectors: 

  • Newspapers (37% of output)
  • Magazines and journals (32%)
  • Books (25%)
  • Directories and databases (6%) 

Online media, though growing in importance, are not part of the publishing industry regulation by the Commission.

In figures, the EU publishing industry accounts for:

  • 0.5% of GDP
  • 121 billion euro of yearly output
  • 43 billion euro value-added in the EU-15 alone  
  • 750,000 jobs in 64,000 publishing and 50,000 other companies, most of which are SMEs 

These figures, high as they may sound, are in constant decline, mainly due to changing habits and to competition from the internet. A particularly major problem for the newpaper industry is the growing proportion of advertising - which traditionally accounts for more than half of newspapers' revenues, and two thirds of business and phone directories' - that is moving to the internet. 

Commissioner Reding, being a former newspaper journalist and president of the Luxembourg Union of Journalists, has deep personal roots in the publishing industry. She was in charge of the dossier for this industry when she was Commissioner for Education, Culture, Youth, Media and Sport in the Prodi Commission, and she took it with her when she became Commissioner for Information Society and the Media under Barroso. 

Issues

Media pluralism:  As the print industry, unlike radio and television, is not subject to licensing schemes requiring impartiality, it makes an important contribution to the diversity of published opinions. The high number of small and medium enterprises in the sector should be upheld. In some countries, however, media concentration has posed a threat to pluralism, the most outstanding example being Italy, where media power is not only more concentrated than in any other EU country, but it also is in the hands of Prime Minister Silvio Berlusconi. 

Migration to electronic media and convergence:  As more and more people in the EU move towards obtaining their information from the internet, the challenge for the media industry is to develop sustainable business models for the online world. DG Information Society encourages the industry to establish business models in which content is paid for. So far, only a few such models exist, and where they do exist, their acceptance by consumers is not very high. The vast majority of newspapers and magazines' internet sites is cross-subsidised from the respective print products. 

One problem for such business models is the competition from operators using information in the public domain, from licensed media such as national radio and TV stations and from other business models which do not charge users for content. Some of these business models - such as online advertising - are being taken up by the publishing industry, but in many cases they will yield lucrative revenues only in the future. 

Out of the present revenue made from online content worldwide, the largest proportion is made in the US. Even when EU citizens look for EU-produced content, they use search engines rather than using information portals. All of the most commonly used search engines - such as Google, Yahoo!, MSN search and Altavista - are based in the US, and the money they make from context-sensitive ads is the most sizeable revenue made on the internet. France hopes to attack the US-based search engines with its government-funded 'Quaero' search engine project.

Addressing the European Publishers' Forum on 6 December 2005 in Brussels, Information Society Commissioner compared the challenges to the publishing industry to those the film industry is facing in chosing between 35 millimetre film and high definition video: "It’s still fine to make movies on film. Like paper, it is tried and tested. Film and print on paper both have the benefit of familiarity and a huge support infrastructure. But there will come a time when the benefits of electronic distribution become so great that the balance of advantage will tip towards the new medium. Look at all the savings to be made if film makers no longer have to make hundreds of celluloid prints costing several thousand euros each[...].
The challenge is to get the timing right – and not to lose the business to new entrants. Once that happens, it’s hard to recapture the initiative. If you don’t believe me, look at Kodak’s current advertising campaign to reinvent itself as a digital photography company, late in the day. Perhaps you are running that campaign in your own publications; maybe take the moral of that story as well as their money."

DG Information Society also thinks it can boost the industry through stronger protection for intellectual property rights and by establishing technological solutions to protect content from being freely distributed, namely digital rights management (DRM). Internet analysts doubt the effectiveness of such measures. 

Advertising: The Commission recognises the importance of advertising for the newspaper and directory sectors and is therefore hesitant to burden those industries with more advertising regulation. 

In the 
consultation
, the Commission asked stakeholders of the sector, civil society and public authorities the following questions: 

         

           "This staff working paper

  1. Does this paper accurately describe the main indicators for competitiveness across different publishing segments?
  2. Are there any further issues you would add in respect of publishing, notably with regard to the policy approaches set out in the Commission’s recent i2010 communication?
  3. Are current industry structures across all segments likely to survive the transition to electronic value chains? What are the major barriers and threats to publishers during the transition? What are the opportunities for publishers arising from new information and communications technologies?
  4. How will business models evolve and how far will Digital Rights Management systems be essential for their successful implementation?

    The nature of the link between diversity of ownership and diversity of content

  5. How far is there tension between the need for open outcomes in economic terms at a time of rapid technological change and the political desire to support democratic values including diversity?
  6. How far is diversity of content and ownership likely to be self-sustaining in fully electronic markets, given for instance lower entry barriers to citizens’ direct
    participation (eg blogs)?
  7. In converging markets, from the perspective of publishing, what approaches would you suggest for co-existence between the two different traditions of regulated, licensed broadcast media and unlicensed press?

    Advertising; integrated media policy

  8. In relation to advertising regulation, what are your reasoned preferences in relation to the different instruments available, voluntary self-regulation, co-regulation and statute law?
  9. From the perspective of publishing, what are the main issues that an integrated media policy - i.e one that covers all media sectors - should address?"

The Commission received more than 30 responses to the consultation, from industry associations and individual companies as well as from NGOs and the governments of France, Germany and the UK. 

Positions

On 22 September 2005, addressing the UK Presidency's Audiovisual Conference in Liverpool, Information Society Commissioner Viviane Reding  said: "I am determined to find the best possible, future-proof balance between a light burden on industry, in order to boost Europe’s competitiveness and to encourage successful cross border services on the one hand, and on the other hand the pursuit of undisputed public policy objectives, such as protection of minors or the fight against racial hatred. "

In its response to the consultation, BEUC, the European Consumers' Organisation, said: "[...]Blindly ‘enhancing’, ‘supporting’ and ‘extending’ the copyright protection regime may confer unjustified monopoly privileges, impede competition, potentially impose unfair costs on consumers and risk to inhibit creativity. Do we want a society in which the free exchange of ideas - on which our society thrives - remains possible or do we want access to content curtailed by excessive copyright regulation and abusive use of DRMs? 

Internet has introduced a huge variety of (sometimes hard to predict) changes in marketplaces that affect lots of industries. It's time to get over it and adapt."

Francisco Balsemão, Chairman of the European Publishers' Council, commented on the organisation's website: "[The] actions of the European Union affect many aspects of our lives. Most, however, sheltered from the day-to-day legislative debate in Brussels, will be blissfully unaware that, as they read this, some current proposals could undermine our tradition of tried and tested self-regulation in favour of statutory intervention. Fundamental freedoms of expression must be protected. Proposals currently under discussion will affect:
- our journalists’ ability to communicate information and ideas or to provide analysis and entertainment; 
- the freedom to carry effective paid-for advertising; 
- our need to diversify and invest across different sectors of the media; 
- our ability to develop new media services to reach our readers; 
- the way in which we protect our intellectual property rights, and the way we foster competitiveness in the face of competition from outside the European Union, both from new media sources and from incumbent state aided media."

Addressing the Liverpool Conference, Ebbe Dal, Chairman of the Media Pluralism Working Party with the European Newspaper Publishers' Associationsaid that the existing EU rules to protect media pluralism are sufficient. "The examples are legion of newspapers that have been taken over but are still edited in line with their traditional viewpoints and ideas. [...] When mergers take place, they often result in better economy and thereby secure an ongoing and even strengthened local newspaper." He argued that any attempt at harmonisation of media pluralism rules in an EU instrument could be detrimental to existing national systems which ensure pluralism and could upset the balance in media market share in some cases. 

Timeline

  • On 23 September 2005, Commissioner Reding met the editors-in-chief of seven newspapers and of the online edition of the British Guardian  to discuss strategic challenges for the publishing industry. No media representative from the big EU countries France, Germany, Italy and Poland - all of which have their very own problems concerning print media - was present.
  • On 6 December 2005, Commissioner Reding presented the results of the consultation at a 'Publishers summit' with the presidents of ENPAFAEPFEPEADP and EPC and senior executives from all sub-sectors of the publishing industry. 
  • Rather than bringing about any particular new piece of regulation, the consultation may result in more general principles to be applied to different pieces of legislation in preparation, such as the review of the Television without Frontiers directive, the review of the regulatory framework for telecommunications  and the review of legislation on copyright and related rights

Further Reading

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